Fluctuating Policies

The government is under fire for the lack of consistency of its housing policies. Critics say that many people have fallen victim to the fluctuating policies.

On September 5, 2002, the economic division of our paper reviewed the housing policies set out by Ministry of Construction and Transportation ever since 1998. It amounted to 36 in number, including the “Sep. 4th Stabilizing Policy for Housing Market.”

Chronologically, 4 were announced in 1998, 5 in 1999, 6 in 2002 and, amazingly 15 in 2001. This year only, 6 policies have been announced, which equals the total number in 2000.

With so many policies announced haphazardly, the policies have produced in many cases not the expected results, but negative effects

From 1998 to 2001, in the name of preventing the recession in the housing industry from the economic crisis, the government had poured out many stimulus packages.

As a result, the real estate market has turned back. But the speculation in real estate around the Seoul-metro area has come back in vogue. It’s like watching the ’80 land speculation. For example, the price of an apartment unit in Kangnam area has shot up by 88% since 1999.

Realizing such problems, the government has come up with conter-measures 6 times only this year. But the rising trend just keeps continuing. For example, the price of a house in Kangnam area has been raised by 21.4%.

Furthermore, the sudden change of the Subscription Account system is drawing criticism. In March of 2000, the government allowed a household to retain multiple subscription accounts. Accordingly, many citizens have signed up for the account. But 191 of those most privileged have lost their number 1 privilege.

One researcher at Samsung Economic Research Institute pointed out, “It is understandable why the government tries to crack down on the land speculators. But the fluctuating policies have hurt the ordinary citizens longing for their own houses. The government should learn putting things into prospective and make policies accordingly.”

Jae-Seong Hwang Ki-Jeong Ko jsonhng@donga.com koh@donga.com